Skip to main content
U.S. flag
An official website of the United States government
Dot gov
The .gov means it’s official. 
Federal government websites often end in .gov or .mil. Before sharing sensitive information, make sure you’re on a federal government site.
Https
The site is secure. 
The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely.

FDIC Board Approves Proposed Rule to Revise Brokered Deposit Regulations

July 30, 2024

WASHINGTON –  The Federal Deposit Insurance Corporation (FDIC) Board of Directors today approved a notice of proposed rulemaking to strengthen the important prudential protections of the agency’s safety and soundness rule on brokered deposits (12 CFR 337.6) that implements section 29 of the Federal Deposit Insurance Act. Based on the FDIC’s experience since the adoption of the 2020 final rule and the large bank failures in 2023, the proposed revisions seek to strengthen the safety and soundness of the banking system, help ensure uniform and consistent reporting of brokered deposits, and reduce operational challenges and reporting burdens on insured depository institutions (IDIs). 

“The changes to the brokered deposit rule contained in this proposal address the fundamental relationship between a bank, a depositor, and a third party intermediary, and the risks the relationship may pose as illustrated by the recent failure of the nonbank deposit broker Synapse Financial,” said FDIC Chairman Martin J. Gruenberg. “The changes would also help strengthen the important prudential protections of the brokered deposit rule required by statutory restrictions and reduce the very serious risks that brokered deposits pose to less than well-capitalized IDIs and the Deposit Insurance Fund.” 

The proposed rule would simplify the definition of “deposit broker,” eliminate the “exclusive deposit placement arrangement” exception, and revise the interpretation of the primary purpose exception (PPE) to consider the third party’s intent in placing customer funds at a particular IDI. In addition, the proposed rule would: 

  • Allow only IDIs to file notices and applications for PPEs; 
  • Revise the “25 percent test” designated business exception for a PPE to be available only to broker-dealers and investment advisers and only if less than 10 percent of the total assets that the broker-dealer or investment adviser has under management for its customers is placed at one or more IDIs; 
  • Eliminate the enabling transactions designated business exception; and,
  • Clarify when an IDI, which has lost its agent institution status, can regain that status for purposes of the limited exception for reciprocal deposits. 

Public comments on the proposal are due 60 days after publication in the Federal Register.

Last Updated: July 30, 2024